Flea and tick product sales rise, and topicals are still on top.
By Elisa Jordan
|Over-the-counter spot-on products do well in the marketplace.(Courtesy of Central Life Sciences)
When Noah loaded up his boat with two of each animal to survive the great flood, no doubt any number of them were scratching behind their ears and chewing the bases of their tails on the journey. Fleas and ticks, long the aggravation of animals and the people who love them, have proved repeatedly that they, too, are survivors.
Over the years, however, science has gotten better at keeping them at bay. That battle received a boost a few years back when topical flea and tick treatments hit the market. Sales soared and dog and cat owners everywhere sang the praises of spot-on products.
Since then, the market has somewhat stabilized. According to the American Pet Products Manufacturers Assn.’s 2007-2008 survey, the percentage of dogs using flea and tick medications is down to 62 percent in 2006 from 72 percent in 1996.
But this figure is down only 1 percent from the 2004 survey, which noted that 63 percent of dogs had used a flea and tick medication. More importantly, these numbers are up from sagging numbers of previous years—56 percent in 1998, 58 percent in 2000 and 57 percent in 2002.
The percentage of cats using flea and tick products fell to 41 percent in 2006, down from 49 in 1996. If anything, the cat market has shown slightly more stability than the dog market. After a whopping drop from 49 percent to 1996 to 34 percent just two years later in 1998, the market increased to 42 percent in 2000 and leveled off at 40 percent for 2002 and 2004 before squeaking out a 1 percent increase in 2006.
So where does the market stand now? Topicals are still king despite the slowdown. The APPMA survey points out, however, that this probably has more to do with products’ effectiveness than a lack of interest.
“It’s been fairly modest growth in the last year,” says Caryn Stichler, vice president of marketing for Sergeants Pet Care. “But the overall market is increasing. That’s actually a good thing because in the last two or three years it’s been flat or slightly down in the over-the-counter channels.”
In fact, OTC spot-on products have made some impressive inroads into the veterinary-dominated market in recent years. Several reasons factor into the shift.
“OTC topicals have gained popularity due to behavioral changes among consumers who value the lower price and greater convenience associated with administering flea and tick treatments in-home,” says Lisa Monahan, associate category manager, animal health, for Hartz Mountain in Secaucus, N.J.
The Great Debate
Since topical flea and tick treatments made their debuts several years ago, the formulas sold exclusively at veterinarians’ offices have dominated the market share. They’ve proved so popular, in fact, that they sometimes find their way into pet supply stores—what’s known as a “gray” market.
Toni Barry, owner of Highland Pet Supply in Atlanta, carries over-the-counter flea and tick topical treatments as well as a couple of veterinary formulas. Why? Insatiable consumer demand.
“It was a little weird in the beginning, and personally I felt bad about carrying them because I didn’t want to take that away from vets,” she says. “If vets were in a position where they could actually profit from it, you would hope that they wouldn’t have to always keep increasing prices on veterinary care because they can make money in other ways. It was something I was really torn about. At the same time, it’s giving the customers what they want and they’re buying it other places.”
Barry’s store, which prides itself on service, keeps the spot-on treatments behind the counter and assists customers when purchasing. This helps prevent theft (there was a rash of topical treatment thefts in the Atlanta area a few years ago) and helps ensure that customers get the correct formula for their pets. She was alarmed when she discovered the local hardware store was selling veterinary-channel flea and tick medications.
“I thought, ‘Well, if people are buying them at the hardware store then there’s no reason why we shouldn’t.’”
At Western Pet Supply in Portland, Ore.—where pet retailers can legally distribute such products—veterinary topicals are similarly kept under lock-and-key.
“We have a customer-service- based store,” says Damon Sheeley, general manager. “So when it comes to products where there’s definitely some potential for misuse, we like to keep that stuff fairly locked up and ask more questions before going out the door.”
Manufacturers that distribute their products through veterinarians, however, worry that not all stores are as conscientious as Highland and Western.
“There’s a certain responsibility there,” says Michael Mockler, junior product manager at Virbac Animal Health in Fort Worth, Texas. “These products are being directly applied to the dog. They’re essentially medications and you want a certain amount of direction and education being given out by a professional, like a veterinarian, to go along with the use of those products, not just somebody that’s on the street who grabs one and starts using it.”
Tobianne Hall, senior brand manager for Central Life Sciences flea and tick products in Phoenix, sees another side to issue.
“In many cases a dealer makes more money selling the over-the-counter brands than the vet brands,” she says. “Because vet brands are only available in what we call a gray market, they’re not buying direct. And the markups are such that their margin becomes very compressed. So while the dollars are high, they can make more money selling over the counter. Dealers think, ‘Well, that’s what people come in and ask about so that’s what I’m going to sell them.’ They miss the opportunity to really up-sell them with over-the-counter brands.”
“The number of players and the opportunities to buy over-the-counter topicals has increased for the consumer,” says Tobianne Hall, senior brand manager for Central Life Sciences flea and tick products in Phoenix. “Chain stores have expanded and grown, and it’s provided more and more opportunities to purchase flea and tick products over the counter. That being said, I think such a large percentage of the market—we estimate it to be about 70 percent—of topicals is still made through the vet. There is a huge opportunity for over-the-counter brands to grow their businesses and their category as a whole by educating consumers that they can find products over the counter.”
Growth in flea and tick may have slowed, but it’s still showing signs of steady, healthy growth—not just with the spot-ons, but also with other products, such as shampoos and household products, Stichler says.
Flea collar sales are still down, but other products continue to rise. Now is the perfect time, in fact, to remind consumers that pest control and prevention is most effective when they take a comprehensive approach. Effective as they are, treating topicals as a magic bullet can leave houses with a serious infestation still in need of help.
“Topicals are still a favorite choice,” Hall says. “But manufacturers have done a lot to start educating both stores and consumers about the need to treat more than just your animal. You need to treat the house, as well.”
“Increased consumer education has helped pet owners understand that treating and preventing infestation require an integrated approach to pest management,” she says. “For this reason, such products as shampoos, home sprays and yard sprays continue to be important vehicles in halting and preventing flea and tick problems.”
The Vet Bet
While products for the environment have enjoyed recent success and have the potential for generating more revenue, some experts anticipate another increase in topical sales. A number of large-scale pharmaceutical companies are launching new veterinary-channel lines.
“Now is an interesting time because there are a lot more topical products being introduced on the market,” says Michael Mockler, junior product manager at Virbac Animal Health in Fort Worth, Texas. “I think this may start to spur [sales] on a little more because each of these companies are going to be putting on their own advertising campaigns, so that will raise awareness, and anytime you raise awareness that’s going to spark growth.”
Whenever increased curiosity comes into play, it’s the perfect time to educate customers. That’s important in a market where user error once caused some animals to get sick. Manufacturers responded by increasing educational materials, changing packaging and providing point-of-sales information in an effort to make products foolproof.
Their efforts have seen success, and pet owners have also become savvier in general.
“With the amount of advertising and awareness out there, people have become more consumer savvy,” says Robert Yarmuth, president of Fleabusters in Fort Lauderdale, Fla. “They are asking a lot more technical questions.”
Toni Barry, owner of Highland Pet Supply in Atlanta, would add the Internet to that equation.
“It’s just easier to access information,” she says. “It’s easier to converse with people who have tried similar products and read product reviews from other people.”
Safety will likely always be on the list of consumers’ needs when it comes to purchasing these products—even though the products have been proved safe and effective when used to correctly.
“There is no question that safety is a big factor in the selection of flea-killing products,” says Vincent Hourihan, vice president of Natural Chemistry Inc. in Stamford, Conn. “When we talk safety, we are not just talking about safety for the dog or cat but also for the user, for children in the home, for groomers and for other companion pets.”
“I think safety remains a concern and probably will always be a concern,” Hall says. “However, it does appear that safety is declining as far as how high up on the list of purchase drivers the safety concerns are for consumers. I think what consumers are really starting to focus on is [effectiveness], and I mean by that what it kills, how fast it kills, how long it lasts.”
Other consumers are opting for more natural remedies and products. It’s a sign of how much the market has grown and the potential it still holds to expand even more.
“The market has become more versatile, with more of the natural products,” says Damon Sheeley, general manager of Western Pet Supply in Portland, Ore. “With our store and our clientele in the Northwest that’s a big thing.”
He estimates that about 25 percent of the store’s flea and tick revenue comes from natural products.
Displaying the Goods
As with any product, a good display helps grab the customers’ attention.
“There are two points,” Yarmuth says. “Have the products prominently displayed but, more importantly, have the sales clerk be familiar with the products and have the technical knowledge to explain the product details.”
Barry and her staff go over the products with customers, as does Sheeley.
Stores in seasonal pest areas can take advantage by doing a big promotion in the store. Areas that experience fleas and ticks year round can change displays regularly to keep up interest.
Customer service, however, helps customers get the right products the first time and prevents them from getting the wrong products or too many products. With the right products, Yurmuth says, there isn’t a need for tons of stuff.
“It’s a quality of life issue,” says Barry, who once had a cat that was allergic to fleas—and some flea remedies. “I just want [animals] to be comfortable.” <HOME>
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